We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Sony Group Corporation (SONY - Free Report) reported second-quarter fiscal 2022 net income per share (on a GAAP basis) of ¥212.29 per share, increasing from ¥170.26 reported in the year-ago quarter. The Zacks Consensus Estimate for earnings was pegged at $1.07 per share.
Adjusted net income came in at ¥242.4 billion compared with ¥209.2 billion in the prior-year quarter.
Quarterly total revenues increased 16% year over year to ¥2,751.9 billion ($19,931.9 million). The Zacks Consensus Estimate was pegged at $21,165.6 million. The uptick was due to an increase in revenue in Game & Network Services (G&NS), Music, Picture, Entertainment, Technology & Services (ET&S) and Imaging & Sensing Solutions business segments, partly offset by the decline in Financial Services sales.
Sony Corporation Price, Consensus and EPS Surprise
In the quarter under review, Sony announced an agreement to acquire Savage Game Studios for an undisclosed amount to further bolster its mobile gaming efforts. Post the acquisition, Savage Studios will join the newly created PlayStation Studios Mobile division.
In the past year, the company’s stock has lost 44.4% of its value compared with the industry’s decline of 43.8%.
Image Source: Zacks Investment Research
Segment Results
In the quarter under review, G&NS sales were up 11.7% year over year to ¥720.7 billion. Sales in the segment increased owing to the positive impact of the forex movement, partly offset by lower sales of non-first-party titles and add-on content. The segment’s operating income was ¥42.1 billion compared with ¥82.7 billion in the prior-year quarter due to higher costs for game software development and acquisition-related expenses partly offset by hardware gains. In the quarter under review, the company sold 3.3 million units of Play Station 5.
Music sales increased 32.3% year over year to ¥359.3 billion in the fiscal second quarter. Sales from the segment were driven by higher recorded music and music publishing sales from paid subscription streaming services. Operating income was ¥78.7 billion, up from ¥50.6 billion in the prior-year quarter, owing to compensation received from litigation settlement pertaining to lawsuits for Recorded Music and Music Publishing and the positive impact of forex rates.
Picture sales increased 29.5% year over year to ¥337.5 billion. Sales were driven by higher television licensing and home entertainment revenues for titles released last year, higher sales for theatrical films, along with a positive impact from the acquisition of Industrial Media and Crunchyroll. This was partly offset by fewer films licensed to digital streaming services and a decline in series delivered for television productions. Operating income was down to ¥27.6 billion compared with an operating income of ¥31.6 billion a year ago due to increased marketing costs to support theatrical releases and fewer films licensed to digital streaming services.
ET&S sales came in at ¥677 billion, up 16.3% year over year. The uptick was due to an increase in sales of digital cameras and favorable foreign exchange rates. Operating income was ¥77.8 billion compared with ¥72.7 billion in the year-ago quarter.
Imaging & Sensing Solutions sales were up 43.2% year over year to ¥398.4 billion. Sales from the segment were driven by an increase in sales of mobile image sensors and favorable forex movement. Operating income was ¥74 billion compared with ¥49.7 billion in the prior-year quarter.
Financial Services sales were down 17.3% year over year to ¥304.5 billion. Sales were affected by a decline in revenues at Sony Life and a fall in net gains on investments in separate accounts. Operating income was ¥54.6 billion compared with ¥43.1 billion in the year-ago quarter, owing to the recovery of unauthorized withdrawal of funds at one of the affiliates of Sony Life in the prior year.
All Other sales were down 15.5% to ¥20.7 billion in the fiscal second quarter. Operating income was ¥4.8 billion compared with ¥8.6 billion in the year-ago quarter.
Other Details
For the quarter under review, total expenses were ¥2,413.8 billion, up 17.2% year over year. Operating income was ¥344 billion, up 8%.
Cash Flow & Liquidity
For the six months ended Sep 30, 2022, Sony used ¥383.3 billion cash in operating activities compared with ¥317 billion of cash provided from operating activities in the prior-year period ended Sep 30, 2021.
As of Sep 30, 2022, the company had ¥1,209.8 billion in cash and cash equivalents with ¥1,291.6 billion of long-term debt.
FY22 Outlook
Sony has provided the outlook for the fiscal year ending Mar 31, 2023. It now expects sales of ¥11,600 billion, up 16.9% year over year. The company previously had guided revenues to be ¥11,500 billion. The top-line performance is likely to be driven by improvement in GN&S, Music, Pictures, and ET&S segment sales.
Net income is estimated to be ¥840 billion, declining 4.8% year over year. Earlier, net income was estimated to be ¥800 billion.
Operating income is now projected to be ¥1,160 billion, suggesting a decline of 3.5% year over year. Earlier, operating income was projected to be ¥1,110 billion.
Operating cash flow is now expected to be ¥820 billion, up 0.8% from the prior fiscal year.
Zacks Rank & Stocks to Consider
Sony currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader consumer discretionary sector are RCI Hospitality (RICK - Free Report) , Swedish Match and Lululemon Athletica (LULU - Free Report) . RCI Hospitality sports a Zacks Rank #1 (Strong Buy), whereas Swedish Match and Lululemon Athletica currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
The Zacks Consensus Estimate for RCI Hospitality’s 2022 earnings is pegged at $5.27 per share, up 2.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
RCI Hospitality’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 39.4%. Shares of RICK have increased 21.4% in the past year.
The Zacks Consensus Estimate for Swedish Match’s 2022 earnings is pegged at 46 cents per share, unchanged in the past 60 days.
Swedish Match’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 8%. Shares of SWMAY have increased 18.7% in the past year.
The Zacks Consensus Estimate for Lululemon’s 2022 earnings is pegged at $9.89 per share, up 4.9% in the past 60 days. The long-term earnings growth rate is anticipated to be 20%.
Lululemon’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.4%. Shares of LULU have decreased 29.2% in the past year.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
SONY's Q2 Earnings & Revenues Increase Y/Y, Guidance Raised
Sony Group Corporation (SONY - Free Report) reported second-quarter fiscal 2022 net income per share (on a GAAP basis) of ¥212.29 per share, increasing from ¥170.26 reported in the year-ago quarter. The Zacks Consensus Estimate for earnings was pegged at $1.07 per share.
Adjusted net income came in at ¥242.4 billion compared with ¥209.2 billion in the prior-year quarter.
Quarterly total revenues increased 16% year over year to ¥2,751.9 billion ($19,931.9 million). The Zacks Consensus Estimate was pegged at $21,165.6 million. The uptick was due to an increase in revenue in Game & Network Services (G&NS), Music, Picture, Entertainment, Technology & Services (ET&S) and Imaging & Sensing Solutions business segments, partly offset by the decline in Financial Services sales.
Sony Corporation Price, Consensus and EPS Surprise
Sony Corporation price-consensus-eps-surprise-chart | Sony Corporation Quote
In the quarter under review, Sony announced an agreement to acquire Savage Game Studios for an undisclosed amount to further bolster its mobile gaming efforts. Post the acquisition, Savage Studios will join the newly created PlayStation Studios Mobile division.
In the past year, the company’s stock has lost 44.4% of its value compared with the industry’s decline of 43.8%.
Image Source: Zacks Investment Research
Segment Results
In the quarter under review, G&NS sales were up 11.7% year over year to ¥720.7 billion. Sales in the segment increased owing to the positive impact of the forex movement, partly offset by lower sales of non-first-party titles and add-on content. The segment’s operating income was ¥42.1 billion compared with ¥82.7 billion in the prior-year quarter due to higher costs for game software development and acquisition-related expenses partly offset by hardware gains. In the quarter under review, the company sold 3.3 million units of Play Station 5.
Music sales increased 32.3% year over year to ¥359.3 billion in the fiscal second quarter. Sales from the segment were driven by higher recorded music and music publishing sales from paid subscription streaming services. Operating income was ¥78.7 billion, up from ¥50.6 billion in the prior-year quarter, owing to compensation received from litigation settlement pertaining to lawsuits for Recorded Music and Music Publishing and the positive impact of forex rates.
Picture sales increased 29.5% year over year to ¥337.5 billion. Sales were driven by higher television licensing and home entertainment revenues for titles released last year, higher sales for theatrical films, along with a positive impact from the acquisition of Industrial Media and Crunchyroll. This was partly offset by fewer films licensed to digital streaming services and a decline in series delivered for television productions. Operating income was down to ¥27.6 billion compared with an operating income of ¥31.6 billion a year ago due to increased marketing costs to support theatrical releases and fewer films licensed to digital streaming services.
ET&S sales came in at ¥677 billion, up 16.3% year over year. The uptick was due to an increase in sales of digital cameras and favorable foreign exchange rates. Operating income was ¥77.8 billion compared with ¥72.7 billion in the year-ago quarter.
Imaging & Sensing Solutions sales were up 43.2% year over year to ¥398.4 billion. Sales from the segment were driven by an increase in sales of mobile image sensors and favorable forex movement. Operating income was ¥74 billion compared with ¥49.7 billion in the prior-year quarter.
Financial Services sales were down 17.3% year over year to ¥304.5 billion. Sales were affected by a decline in revenues at Sony Life and a fall in net gains on investments in separate accounts. Operating income was ¥54.6 billion compared with ¥43.1 billion in the year-ago quarter, owing to the recovery of unauthorized withdrawal of funds at one of the affiliates of Sony Life in the prior year.
All Other sales were down 15.5% to ¥20.7 billion in the fiscal second quarter. Operating income was ¥4.8 billion compared with ¥8.6 billion in the year-ago quarter.
Other Details
For the quarter under review, total expenses were ¥2,413.8 billion, up 17.2% year over year. Operating income was ¥344 billion, up 8%.
Cash Flow & Liquidity
For the six months ended Sep 30, 2022, Sony used ¥383.3 billion cash in operating activities compared with ¥317 billion of cash provided from operating activities in the prior-year period ended Sep 30, 2021.
As of Sep 30, 2022, the company had ¥1,209.8 billion in cash and cash equivalents with ¥1,291.6 billion of long-term debt.
FY22 Outlook
Sony has provided the outlook for the fiscal year ending Mar 31, 2023. It now expects sales of ¥11,600 billion, up 16.9% year over year. The company previously had guided revenues to be ¥11,500 billion. The top-line performance is likely to be driven by improvement in GN&S, Music, Pictures, and ET&S segment sales.
Net income is estimated to be ¥840 billion, declining 4.8% year over year. Earlier, net income was estimated to be ¥800 billion.
Operating income is now projected to be ¥1,160 billion, suggesting a decline of 3.5% year over year. Earlier, operating income was projected to be ¥1,110 billion.
Operating cash flow is now expected to be ¥820 billion, up 0.8% from the prior fiscal year.
Zacks Rank & Stocks to Consider
Sony currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader consumer discretionary sector are RCI Hospitality (RICK - Free Report) , Swedish Match and Lululemon Athletica (LULU - Free Report) . RCI Hospitality sports a Zacks Rank #1 (Strong Buy), whereas Swedish Match and Lululemon Athletica currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
The Zacks Consensus Estimate for RCI Hospitality’s 2022 earnings is pegged at $5.27 per share, up 2.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
RCI Hospitality’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 39.4%. Shares of RICK have increased 21.4% in the past year.
The Zacks Consensus Estimate for Swedish Match’s 2022 earnings is pegged at 46 cents per share, unchanged in the past 60 days.
Swedish Match’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 8%. Shares of SWMAY have increased 18.7% in the past year.
The Zacks Consensus Estimate for Lululemon’s 2022 earnings is pegged at $9.89 per share, up 4.9% in the past 60 days. The long-term earnings growth rate is anticipated to be 20%.
Lululemon’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.4%. Shares of LULU have decreased 29.2% in the past year.